As with any problem or issue out there, there's a reason behind it all. Apparently, HP has "forgotten" to take off the protective film covering the bezel hole for the webcam enclosed inside. So following what pics hinted from engadget, I ventured on performing this minor surgery on my MacBook Mini.
It was easy to pry open the seam on the Mini's lid; all you have to do is get a thin sturdy piece of material that you could slide in between the upper and lower parts of the lid.
Use the same material as wedge to keep the seam open as you work on it. Grab a tweezer to pick and peel the thin film stuck on to the inner side of the display bezel.
(I was so excited to do this mod that at first I tried to disassemble the bezel itself, luckily I realized what was wrong before further damage was done)
I'd agree that HP indeed "forgot" for what purpose did that film serve but to bury the cam in obscurity anyway? The plastic used for the film was tinted and also reflective - see how it sparkled as it reflected the light coming from my digicam's flash.
If you're planning to do this, note that HP isn't endorsing this method at all. In fact, an HP employee was reported to have done this operation on her Vivienne Tam edition Mini 1000; the vid used to be posted in gadgeteer but was taken off at HP's bidding after a while.
HP doesn't want HP Mini users to try this trick on their units as it may potentially cause damage to the machine if not done properly; i.e. wrong poke with the tweezer could screw up the webcam itself, scratch the lid and crack the bezel, etc. so proceed with utter caution and care.
Normally, I wouldn't have minded to wait. But curiosity got the better of me and so I did it.
At least now I could play with Photo Booth for some "I love myself sessions" ;)